Unleash Prosperity Hotline #1013

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Unleash Prosperity Hotline
Issue #1013
05/07/2024
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1) The National Conservatism Canard

Some of our friends on the right (organizations and influencers) have begun to dabble in a dangerous new strain of economic thinking called National Conservatism. Some of the ideas of this new movement are sound, such as the fight against globalism and the fight to preserve national sovereignty.

But other policy ideas strike us as economically loony: breaking up our tech industry giants, trade protectionism, forced union laws, anti-legal immigration, refundable child tax credits, and corporate welfare subsidies.

One of the leaders of the “Nat Cons,” Senator Josh Hawley (R-Missouri) voted with Democrats in support of Biden’s “Joint Employer” rule that could effectively end franchise stores – such as independently-owned Burger King and Wendy’s restaurants.

Another, Senator JD Vance (R-Ohio), recently said hyper-regulatory FTC chair Lina Khan “is doing a pretty good job.” This week Vance is trying to attach $7 billion of federal subsidies for internet services to the FAA bill.

The premise of all these government interventions into the economy is that we must weaken free markets in exchange for more government control of our economy. But we’ve never met a nation that got poor because it had TOO MUCH economic freedom. Have you?

Surrendering economic freedom — and giving more power to politicians — to promote some vague common good is a fool’s errand.

It puts us on FA Hayek’s “Road to Serfdom” and makes everyone worse off.

Why do people still struggle with the simple and timeless theorem that more freedom means more prosperity for everyone? It’s so simple.

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2) Under Biden's Plan Capital Gains Tax Would Exceed 50% in more than 10 States

Under Biden's plan, capital gains for higher-income earners are taxed at the ordinary income tax rate, which he would raise to 39.6%. He also raises the 3.8% net investment surtax to 5%.

"Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent," Biden's Treasury Department proudly states.

https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf

But most states (and some blue cities) impose add-on cap gains taxes. This map from the Daily Mail shows that in 11 states, more than half of the nominal (not real, because there is no inflation-indexing) gains would be taken by federal and state taxes. In California, the rate could reach an astonishing 57.9%.

Brilliant idea Joe! This is a good way to bring vital investment in start-up companies to a standstill.

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3) Move In Chicago to Recall America’s Worst Mayor

Just as we predicted when ultra-leftist Brandon Jonson was elected mayor last year, Chicago continues to sink into despair and disorder. On Sunday, its popular Cinco de Mayo parade was canceled after shots were fired along the parade route.

Chaos reigns in the Windy City. Crime Is up, the city is awash in illegal migrants, and companies and residents continue to flee the city.

Voters are clearly having buyer's remorse. He has the lowest approval rating of any first-term mayor in recent Chicago history.

There is now a move afoot to dismiss him before this term ends in 2027 – which would require a new law to recall the city’s mayor. It is an uphill struggle to get this on the ballot, but it has momentum. Johnson calls the effort a move by "extreme right-wing" forces who oppose “racial diversity” – a typical race-baiting charge of incompetent scoundrels.

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4) British Petroleum Backs Off “Net Zero” Fossil Fuels Pledge

Some twenty years ago, BP tried to rebrand itself as “Beyond Petroleum” with an inane virtue-signaling pledge to stop producing fossil fuels. The company became the subject of ridicule. It would be like Heinz pledging not to make ketchup.

The pledge was to swear off its own product (instead of defending itself from extreme environmentalists) by holding carbon emissions constant, and instead investing in a portfolio of wind and solar farms.

But the world isn’t retreating from oil and gas –– it’s using more of it than ever before. (As regular HOTLINE readers know, the so-called Great Energy Transition is a media-driven fiction.)

So BP is expected to announce as early as this week that it will scale back its pledge to cut hydrocarbon production a full 40% by 2030. The company is calling this shift a way to “pragmatically adapt” to the world’s surging energy demands.

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5) This Is How California Defines High-Speed Rail “Success”

Our CTUP senior fellow Wendell Cox probably knows more about the economics (or rather the lack of it) of high-speed rail than anyone in the country. He’s been warning for years on these pages that the California high-speed rail project may be one of the greatest boondoggles of all time. The losses are going to be in the tens of billions of dollars for a railroad that almost no one is going to ride.

Hundreds of millions have already been spent and the cost estimates keep escalating. So far, nearly ALL of the taxpayer dollars have disappeared into a cesspool of bureaucratic waste.

Now they are boasting that they did build this one 1600-foot bridge. We are all familiar with the saying that every journey begins with a single step, but this is ridiculous.

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6) America’s Greatest Stock Picker!

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